2026 and 2027 Tax Numbers: Credits and Deductions

Each year the IRS publishes inflation-adjusted tax numbers. The 2026 figures come from Revenue Procedure 2025-32. The 2027 figures come from Revenue Procedure 2026-35, announced in IR-2026-133 on November 5, 2026. A credit lowers your tax bill, and some credits can be paid to you even if you owe no tax. A deduction lowers the income you pay tax on. It is not a refund.

If you want help applying these amounts to your return, call 713-678-8627, email [email protected], or book a consultation.

Credits for your family

These are the maximum amounts. Other rules, including income limits, can lower what you receive.

Credit	2026	2027
Child Tax Credit, per qualifying child	$2,200	$2,300
Refundable part of the Child Tax Credit (additional child tax credit)	$1,700	$1,800
Earned Income Tax Credit, no qualifying child	$664	$685
Earned Income Tax Credit, one qualifying child	$4,427	$4,573
Earned Income Tax Credit, two qualifying children	$7,316	$7,552
Earned Income Tax Credit, three or more qualifying children	$8,231	$8,496
EITC investment income limit. If you go over this amount, you generally cannot claim the credit	$12,200	$12,600

Sources: Rev. Proc. 2025-32, sections 4.05 and 4.06, for 2026; Rev. Proc. 2026-35, sections 3.05 and 3.06, for 2027.

The Child Tax Credit amounts above are the maxima under section 24. Up to $1,700 in 2026 and $1,800 in 2027 may be refundable, which means you may receive that part even if you owe no federal income tax. For a broader look at the credit in the prior year, see What’s New With the Child Tax Credit for the 2025 Tax Year.

The Earned Income Tax Credit also shrinks as income rises, and it reaches zero at the completed phase-out amounts below. The table uses the greater of adjusted gross income or earned income, as the revenue procedures do.

Income at which the EITC reaches zero	2026	2027
Married filing jointly, no qualifying child	$26,820	$27,684
Married filing jointly, one qualifying child	$58,863	$60,787
Married filing jointly, two qualifying children	$65,899	$68,029
Married filing jointly, three or more qualifying children	$70,244	$72,512
All other filing statuses, no qualifying child	$19,540	$20,164
All other filing statuses, one qualifying child	$51,593	$53,277
All other filing statuses, two qualifying children	$58,629	$60,519
All other filing statuses, three or more qualifying children	$62,974	$65,002

Sources: Rev. Proc. 2025-32, section 4.06; Rev. Proc. 2026-35, section 3.06. The credit begins to phase out at lower income levels listed in those same tables.

Bigger child care credit starting in 2026

If you pay for day care so you can work or look for work, the Child and Dependent Care Credit gets larger beginning with tax year 2026. The IRS says the maximum credit rate increases from 35% to 50% of qualifying expenses. The expense limits do not change.

Child and Dependent Care Credit	2025	2026
Maximum credit rate	35% of qualifying expenses	50% of qualifying expenses
Expense limit, one qualifying individual	$3,000	$3,000
Expense limit, two or more qualifying individuals	$6,000	$6,000

Source: IRS page “One, Big, Beautiful Bill provisions,” Child and Dependent Care Credit enhancement (section 70405).

The rate you get depends on your income, and other eligibility rules apply. For a child under 13, eligible costs may include day care, before- and after-school care, and day camps. Overnight camps, schooling costs, and costs that are not work-related generally do not qualify. For example, the 50% maximum rate applied to the $3,000 limit works out to $1,500 for one child. That is our arithmetic from the IRS figures, not a separate IRS amount, and many families will receive a lower rate.

Your standard deduction

The standard deduction is the amount you can subtract from income without listing each expense. Married people who file separately use the same amount as single filers. Surviving spouses use the joint amount.

How you file	2026	2027
Single, or married filing separately	$16,100	$16,600
Married filing jointly, or qualifying surviving spouse	$32,200	$33,200
Head of household	$24,150	$24,925

Sources: Rev. Proc. 2025-32, section 4.14, and the IRS Working Families Tax Cuts page, for 2026; Rev. Proc. 2026-35, section 3.15, and IR-2026-133, for 2027. The Working Families Tax Cuts page lists 2025 and 2026 standard deduction amounts, not 2027.

If you are age 65 or older, or blind, you may also take an additional standard deduction. That amount is separate from the new $6,000 senior deduction described below. For someone who can be claimed as a dependent, a different, smaller standard deduction cap applies.

Other standard deduction amounts	2026	2027
Additional amount for age 65 or older, or for blindness	$1,650	$1,700
That additional amount if you are also unmarried and not a surviving spouse	$2,050	$2,100
Standard deduction for a dependent, maximum of this floor or $450 (2026) / $500 (2027) plus earned income	$1,350	$1,400

Sources: Rev. Proc. 2025-32, section 4.14(2)–(3); Rev. Proc. 2026-35, section 3.15(2)–(3).

New deductions

These dollar caps are set by statute for tax years 2025 through 2028. They are not in the IRS inflation lists in Rev. Proc. 2025-32 or Rev. Proc. 2026-35, so the 2026 and 2027 columns show the same legal caps, except for the state and local tax limit.

Deduction	2026	2027
Extra deduction for age 65 or older, per eligible person	$6,000	$6,000 (same statutory cap; not inflation-adjusted in Rev. Proc. 2026-35)
Qualified tips, maximum	$25,000	$25,000 (same statutory cap; not inflation-adjusted in Rev. Proc. 2026-35)
Qualified overtime, most filers. This is only the extra half of time-and-a-half, not all overtime pay	$12,500	$12,500 (same statutory cap; not inflation-adjusted in Rev. Proc. 2026-35)
Qualified overtime, married filing jointly	$25,000	$25,000 (same statutory cap; not inflation-adjusted in Rev. Proc. 2026-35)
State and local taxes (only if you itemize), most filers	$40,400	Not yet published by the IRS

Sources: IRS page “Working Families Tax Cuts – Individuals and workers,” for the senior, tips, and overtime deductions (OBBBA sections 70103, 70201, and 70202). IRS page “Correction to state and local income tax deduction amount in the 2026 Form 1040-ES,” for the 2026 state and local tax cap. Rev. Proc. 2026-35 and IR-2026-133 do not list a 2027 state and local tax cap, so that cell is not filled with a dollar amount.

The IRS has not published a 2027 state and local tax cap in its 2027 inflation procedure. Section 164(b)(7) of the Internal Revenue Code sets a statutory formula of 101% of the prior-year cap, which would be $40,804 ($20,402 if married filing separately). That figure is not an IRS-published amount, and it is not used as a verified 2027 number in this article.

A few rules that did not fit on a short graphic, all from the IRS Working Families Tax Cuts page unless noted:

• The new $6,000 senior deduction is in addition to the extra standard deduction for seniors under existing law. It applies per eligible person, or $12,000 if both spouses qualify. It phases out when modified adjusted gross income is over $75,000, or $150,000 on a joint return. You must be age 65 on or before the last day of the tax year.
• The tips and overtime deductions phase out when modified adjusted gross income is over $150,000, or $300,000 on a joint return.
• The overtime deduction covers only the portion of qualified overtime pay that exceeds the regular rate of pay, for example the “half” portion of “time-and-a-half.”
• Qualified tips must be in an occupation the IRS identified as customarily and regularly receiving tips on or before December 31, 2024. People in a specified service trade or business under section 199A, and employees of an employer in that kind of business, do not qualify for the tips deduction.
• The senior, tips, and overtime deductions are available whether or not you itemize. The IRS page says to include your Social Security number on the return and, if you are married, to file jointly.
• The 2026 state and local tax cap is $20,200 if you are married filing separately. It is reduced if modified adjusted gross income is more than $505,000 ($252,500 if married filing separately), but not below $10,000 ($5,000 if married filing separately). You can claim this deduction only if you itemize. Those 2026 details come from the Form 1040-ES correction page.

For the law that added several of these provisions, see What’s New Under the One Big Beautiful Bill Act.

Example (composite, not a real client). A 67-year-old East End resident files as single in 2026. She can take the $16,100 standard deduction, plus the $2,050 additional standard deduction for age because she is unmarried and is not a surviving spouse, plus the new $6,000 senior deduction if her modified adjusted gross income is under the phase-out. Those amounts lower the income she pays tax on. They are not a refund. In 2027 her standard deduction would be $16,600 and the additional amount for age would be $2,100. The new senior deduction would still be $6,000, because the law keeps that cap through 2028.

Frequently asked questions

Is a credit the same as a deduction?

No. A deduction lowers the income you pay tax on. A credit lowers your tax, dollar for dollar, and some credits can be refundable. The Child Tax Credit and the Earned Income Tax Credit are credits. The standard deduction and the new senior, tips, and overtime amounts are deductions.

Can I claim both the extra standard deduction for age 65 and the new $6,000 senior deduction?

Yes, if you qualify for both. The IRS Working Families Tax Cuts page says the new deduction is in addition to the standard deduction for seniors available under existing law. Income limits can reduce the new $6,000 amount.

Why is there no 2027 amount for state and local taxes?

Because the IRS has not published one in Revenue Procedure 2026-35 or in IR-2026-133. This article does not guess that number. When the IRS publishes it, the figure can be updated.

Does the overtime deduction cover all of my overtime pay?

No. The IRS page says you may deduct only the portion of qualified overtime pay that exceeds your regular rate of pay, such as the extra half of time-and-a-half, up to $12,500, or $25,000 if you file jointly. Income limits can reduce it.

Do I have to itemize to use these new deductions?

Not for the senior, tips, or overtime deductions. The IRS page says those are available to eligible taxpayers whether or not they itemize. The state and local tax cap applies only if you itemize.

Talk with us

Santana & Associates has served Houston since 1979. For help with your 2026 or 2027 return, call 713-678-8627, email [email protected], book a consultation, or see consultation details. You can also visit santanaacct.com, review what to bring, use the document checklist or the estimated tax calculator, or read about tax preparation. Hablamos español.